Abstract

Online shopping has become prominent in the business environment today. For example, many businesses have established an online platform to sell their products online apart from the sales they carry out in the physical stores.  Online shopping has become prominent due to the emergence and spread of the internet. In this research paper, the aim was To examine the impact of online shopping on retail business. The objectives were to examine the level of online shopping among retail businesses, the impact of online shopping on sales, impact of online shopping on profitability, and impact of online shopping on market expansion among retail businesses. Data was collected using semi-structured interviews and analysed using thematic analysis. A sample of 18 retailers was involved in the study. From the analysis of the data collected, it was established that online shopping is significant among all types of retail businesses. On the other hand, it was found that the impact of online shopping on sales is mixed, with some cases showing a positive impact and other cases showing no impact. The reason for this is for some retailers, online shopping attracts new customers while for others, it cannibalizes existing channels with no impact on sales.  There were also mixed results on the impact of online shopping on profitability. There were cases of improved profitability and other cases of reduced profitability. Lastly, there were mixed results in relation to the impact of online shopping on market expansion, with some retailers realizing market expansion due to online shopping and others not realizing market expansion despite implementing online shopping.

Chapter 1: Introduction

Online shopping has become increasingly popular in recent times. For example, in 2020, the global online shopping market size was almost 4 trillion (Bhuvaneshwari and Irulappan, 2022). In the US, the number of online shoppers is expected to reach 300 million by 2023, which is 91% of the nation’s population. Online shopping is basically the activity of purchasing products over the internet. It involves people ordering goods over the internet and having them delivered to their homes or at a nearby location for them to pick.

One of the reasons why online shopping has grown significantly over time is convenience. Prior to this form of shopping, consumers were compelled to go the physical store to purchase whatever they needed (Dost et al., 2015). In some cases, one had to go through more than one store before they could get the desired product. This was inconveniencing, especially when one is busy and has limited time to go shopping. Online shopping helped to resolve this problem. With online shopping, one can easily search on the internet for the desired product, identify the business organisation which offers the product and order for it (Sabbineni Poojitha et al., 2022). One is thereby able to shop from the comfort of their home which is highly convenient.

Another reason is free or low-cost delivery. As a way of attracting customers, some ecommerce businesses offer free delivery of products. Some businesses offer free delivery within a particular locality (Koch et al., 2020). Other businesses offer delivery of products at a small fee. Free or low-cost delivery is an incentive that motivates people to purchase online because it lowers the overall cost. For example, when one purchases from the physical store, especially if the store is at a considerable distance, they are likely to spend more to acquire the desired product due the additional transport cost.

The chance to compare prices is also another reason why people purchase online. Visiting the physical store does not provide a chance for an individual to compare the prices of products unless they visit multiple stores before deciding which one to buy from. This is tedious and time consuming (Kumar and Khurana, 2019). Online shopping allows one to check the price options available for them and select the cheapest option or the product that provides value for money in terms of the quality and pricing.

Other reasons that make people to buy products online include product options, lack of sales pressure, ability to find products easily, and clear information about products. People opt for online shopping because it allows them to explore different product options (Duarte et al., 2018). For example, if one needs to purchase a television set, online purchase allows one to examine different television sets and determine the one which meets their needs in terms of size, quality, and price (Rahman et al., 2018). With online shopping allows one to examine different options, a consumer is able to select the most appropriate product.

With regard to sales pressure, when one visits the physical store, they are likely to be pressured by salespeople in the store to buy some products. Each store has salespeople who not only help to serve customers but also convince them to purchase particular items (Dost et al., 2015). For example, it is common to find a salesperson informing customers in the store the benefits of a product and why they should purchase. It is for this reason that some customers find themselves buying products they had not planned for (Sabbineni Poojitha et al., 2022). Online shopping allows one to avoid cases of purchasing products they had not planned for. This is because there are no salespeople in online shopping who can pressure one to buy a particular product. In online shopping, one looks for the product they desire and if it is not available, they can opt not to make any purchase (Koch et al., 2020). For example, if one wants to buy a black refrigerator and fails to find one that is black they may opt against buying a refrigerator unlike in the physical store where they can easily be convinced by the salesperson to purchase one of a different colour.

Online shopping also allows one to find products quickly because it is a matter of using the product name to search on the website or relevant online platform. Immediately one makes a search, all available options become visible, which allows one to select one they like (Kumar & Khurana, 2019). This is not the case with the physical store since the options available in the store may be few and none may be appealing to the customer.

Lastly, online shopping platforms provide information about products, which enables a consumer to have knowledge of the product they are purchasing. The information provided on products also allows one to select the product that meets their specific needs. This is not the case with physical stores which rarely provides information about products unless one asks for it.

The above highlighted reasons have been instrumental to the growth of online shopping over time to the extent that online shopping has threatened to replace the physical stores. It is the increased preference for online shopping that have compelled business organisations to develop an online aspect of operation even as they maintain their physical stores (Duarte et al., 2018). The establishment of online shopping platforms among business organisations in recent times was accelerated by the emergence of COVID-19 pandemic. The pandemic limited the movement of people due to movement restrictions imposed by government around the world. With people compelled to stay at home as a way of containing the spread of the virus, the main shopping option available for most customers was the online shopping. Businesses were thereby compelled to establish online platforms to ensure they continue selling products even with the restrictions.

One type of business that has embraced online shopping is the retail businesses. Retail businesses are those organisations which sell products in small quantities to customers. Retail businesses range from small-scale to large scale operators such as Walmart. Many retail businesses have established online platforms in order to enhance their sales and reach out to many customers in the market (Jimenez et al., 2019). With many retail businesses embracing online shopping strategy, the question is, what is its impact on these businesses? In this research study, the impact of online shopping on retail business is explored.

Aim

To examine the impact of online shopping on retail business

Objectives

• To examine the level of online shopping in retail businesses
• To determine the impact of online shopping on sales in retail business
• To examine the impact of on online shopping on profitability of retail business
• To explore the effect of online shopping on market expansion of retail businesses

Problem statement

As indicated, online shopping has become a major feature in businesses, with many businesses around the world establishing online shopping platforms to sell their products online. It has also led to emergence of purely online businesses which do not have any physical stores but rather sell their products exclusively online. However, there is limited knowledge with regard to the impact of online shopping on businesses. This study thereby aims to provide insight into this issue in order to be determined whether online shopping is an effective strategy for retail businesses.

Rationale of study

While online shopping has become prominent in the world today, there are still some businesses which are yet to embrace this form of business completely. There are businesses which still prefer to serve their customers in the physical stores. There are other businesses which, while they have established an online platform where customers goods online, they are yet to establish an operation mechanism that would allow them to sell their products online in a more effective manner. This could be because they are sceptical about the significance of online shopping in terms of its ability to enhance the level of sales and profitability. This study is thereby necessary as it would provide insight into this subject and inform strategy change among retail businesses.

Scope and boundaries of the study

The scope of the study is the retail business. The study is focused on retail business organisations and how online shopping affects them. With the focus being on online shopping, the study is thereby limited to those retail businesses have online shopping platforms. The study is not limited to particular physical boundaries. Instead, it is focused on retail business in general irrespective of location.

 

 

Chapter 2: Literature review

Introduction

This chapter examines what previous studies indicate about the impact of online shopping on retail business. The aim of the chapter is to provide insight into the research subject as well as inform the development of hypotheses. The chapter also highlights theories that may explain the increased level of online shopping and its possible impact on retail business.

Theories

The most relevant theories with regard to online shopping are the flow theory, technology acceptance model, web behaviour model, and innovation diffusion theory.

Flow theory

The flow theory holds that there are activities that people engage because they provide them with pleasure. People are motivated by the optimal experience they normally have when they engage in these activities to take part in them (Obadă, 2013). The flow theory implies that people engage in particular activities not because these activities have any monetary value or bring them fame but rather it is because the activities provide a particular desired experience. It is this experience which makes them to constantly engage in the activities.

The flow theory explains why consumers engage or refuse in online shopping. Those who engage in online shopping is because of the positive experience it provides while those who refuse to engage in it is because of the negative experience they had with this form of shopping (Beard, 2015). For example, those who engage in online shopping do it because they find it cheaper and/or more convenient. On the other hand, those who avoid buying online could be due because of the negative experience they had (Obadă, 2013). However, it is also possible that those who fail to purchase their products online prefer going to the physical store because of the good experience they normally have when they visit the store. The flow theory provides insight into the possible reasons for the level of online shopping among consumers in the market. For example, if the level of online shopping is high, the flow theory indicates that it may be because of the optimal positive experience people get from purchasing their products online. On the other hand, if the level of online shopping in a particular market is low, it could be because most consumers in this market have had a negative experience of purchasing products online.

Technology acceptance model

The technology acceptance model holds that the acceptance of a technology is influenced by two factors which are the perceived ease of use and usefulness. If one perceives a technology to be easy to use, they are likely to use (Holden & Karsh, 2010). On the other hand, if they perceive it to be hard to use, they are likely to refuse using it. Similarly, one can use a technology if they consider it to be useful to them and avoid using it if they do not perceive it to be useful.

The technology acceptance model may explain the high use of online shopping among consumers in the market. This model implies that consumers find online shopping to be ease to use and useful to them (Turner et al., 2010). This model may also explain why online shopping is more popular among the young people when compared to the old. This is because the older individual may find it harder to use online platforms since they are not conversant with the technology involved.

Innovation diffusion theory

Innovation diffusion theory explains how a product or idea, over time, gains momentum and spreads in a particular population. The theory indicates that an innovation diffuses through five stages and these are awareness, persuasion, decision, implementation, and continuation (Wani & Ali, 2015). It implies that one can use an innovation only if they are aware of it and are persuaded to use it. On the other hand, continued use of an innovation depends on the experience one has from the initial use. If, after implementation, one has a negative experience, they are likely to stop using innovation.

The innovation, like other theories, provides insight into why online shopping is gaining popularity among people. While online shopping has been in existence for long, people became more aware of it during the pandemic (Lee et al., 2011). People were compelled to purchase online because of movement restrictions. This initial experience is likely to have been positive and this has encouraged people to continue using online shopping.

Level of online shopping in retail business

There is limited empirical research which has been focused exclusively on the level of online shopping in retail business. However, there is data which shows the level of online shopping in retail. For example, according to Statista, the global retail ecommerce sales in 2021 were 5.211 trillion dollars (Statista, n.d.). The sales are expected to increase to 8.148 trillion dollars by 2026. The above statistics show that online shopping is significant. There is also huge potential for growth in online shopping (Statista, n.d.). For example, in 2021, the total retail sales globally were 27.7 trillion dollars. This means that the online retail sales in 2021 were only 18.81% of the total sales. It implies that there is a huge market that is yet to switch to online shopping, a market that can be explored by retail businesses to achieve higher sales.

The growing level of online shopping can be explained by the above highlighted theories. For example, based on the flow theory, increasing preference of online shopping could be due to consumers deriving pleasure or a good experience from buying products online. The experience could the high level of convenience that comes with online shopping, the high quality of products they get when engage in online shopping, and/or the low prices they enjoy from buying online (Beard, 2015). On the other hand, when technology acceptance model is applied, the increase on online shopping could be due to the increased level of acceptance of online shopping as a technology. This could be due to how easy it is to use as well as how useful they find online shopping especially when they compare it with shopping in the physical stores. For example, consumers may find online shopping to be useful because it gives them an opportunity to explore different products which allows them to choose the best product.

Impact of online shopping on sales in retail business

A few studies have been carried out on the impact of online shopping on the performance of retail business, especially in relation to sales. While this has made it hard to get better insight into the influence of online shopping on retail business, they still provide adequate information that can be used to hypothesise on the impact of online shopping on sales and other performance aspects for retail businesses. One of the studies is that of Saha (2015) who examines the impact of online shopping on retail trade business, with focus on turnover and profitability. Turnover, in this case, is the sales made by retailers. Saha (2015) established that retailers reported reduction in turnover. Those who did not report a decline in turnover reported stagnation in turnover. It means these retailers were not experiencing an increase in sales. The reason Saha (2016) gives for reduction in turnover is the increased level of competition that has come with increase in the level of online shopping. While it has not been stated in this study, it can accurately be assumed that the retailers examined in the study by Saha (2015) are those who have not introduced the online aspect in their business operations. Instead, these retailers are still operating with physical stores. These retailers are thereby in direct competition with purely online companies and those who have incorporated the online aspect in their business operations. Reduction in turnover in this case is given since online shopping has taken a significant market share (Jan et al., 2019). Coupled with how convenient online shopping is, those who have access to the internet are likely to purchase products online. It means that the size of the market for physical store retailers has reduced considerably, lowering sales for these retailers.

In their study, Cao and Li (2015) examine the impact of cross-channel integration in the growth of sales among retailers. The cross-channel integration focused on in this study is the use of both the physical stores and other channels such as the online channels like websites. Cao and Li (2015) established that cross-channel integration contributes to firm’s sales growth. The results in this study imply that when retailers incorporate online shopping in their operation, sales are likely to growth. The possible reason for this is cross-channel integration allows a company to explore more market for its products (Oh, Teo & Sambamurthy, 2012). It is important to note that the physical store is limited because few people can easily access it. Those who are at a bigger distance may fail to access the physical store which limits the sales a firm can achieve. When the online aspect is introduced, a retailer is able to reach out to other consumers, even those who are at a considerable distance (Schramm-Klein, Wagner, Steinmann & Morschett, 2011). With these consumers now aware of the retailer and its products, they are likely to purchase the products, especially if the retailer has a delivery system in place.

Another possible reason is cross-channel integration allows a retailer to take advantage of different channels to maximise sales. It is important to note that there are those consumers who prefer to visit the physical store, examine the product themselves before making a decision on whether to make a purchase (Van Baal, 2014). On the other hand, there are those who prefer to purchase products online because of convenience. Cross-channel integration thereby allows a retailer to cater for both sets of customers, increasing sales.

The study by Cao and Li (2015) shows that online shopping has the potential of significantly increasing sales for retailers if it is incorporated as one of the channels a retailer uses to avail products in the market. In this case, the impact of online shopping on sales for retailers is positive. However, as Cao and Li (2015) suggests, the impact of online shopping may depend on what channel the company has focused on significantly. For example, if a company has developed its brand around physical store experience, then cross-channel integration is unlikely to have a positive impact on sales because of the reluctance of consumers to switch to the online channel (Verhoef, Kannan & Inman, 2015). As such, in integrating online shopping in their operations, retailers have to create the perception among consumers that this new channel can also be trusted.

Lastly, in his study, Dahiya (2017) examines the impact of ecommerce on retailers in India. He established that ecommerce has a negative impact on sales of offline retailers. Ecommerce is basically online shopping because it is involves buying and selling of goods over the internet. The reasons given as to why ecommerce has a negative effect on the turnover of offline retailers include variety of stocks and customer services. For example, online retailers provide consumers with a variety of products which they can choose from which is not the case with offline retailers which provide only a small number of options (Suvarna, 2016). On the other hand, online retailers provide services such as home delivery, a service that offline retailers do not provide. As such, online retailers sell more when compared to offline retailers.

From the reviewed studies, it can be deduced that online shopping has either a positive or negative impact on the retail business depending on how it is looked at. If online shopping is considered as a separate entity competing for the same market with brick and mortar retailers, then the impact on retailers is negative (Herhausen, Binder, Schoegel & Herrmann, 2015). On the other hand, if online shopping is considered as part of the retail business, where retailers have incorporated in the online shopping in their operations, then the impact is positive.

Impact of online shopping on profitability of retail business

Like the case of sales, few studies have examined the impact of online shopping on profitability of retail businesses. In fact, the few studies which examine impact of online shopping on sales also address the impact of online shopping on profitability. For example, apart from examining the impact of online shopping on sales, Saha (2015) also examines the impact of online shopping on profitability. Like the case of sales, Saha (2015) found that online shopping has also a negative impact of profitability. This is because of the increased level of competition in the market from online traders. As Saha (2015) points out, the high level of competition for retailers that has come with the emergence of online shopping has compelled retailers to sell their products at a lower price. This lowers their profit margin.

As pointed out, the negative impact of online shopping on profitability of retail businesses is based on the accurate assumption that online shopping is operating independently. In this case, it is examined in relation to the brick-and-mortar retail stores. With online retailers competing for the same market as brick-and-mortar retailers which sell exclusively from their physical stores, the market available for each type reduces (Šaković Jovanović et al., 2020). This thereby lowers the profitability level for the brick and mortar retailers.

If the study by Cao and Li (2015) is considered, where online shopping is not treated as a separate entity but rather as part of a retailer’s channel, then it can be deduced that online shopping helps to enhance the profitability level. This is because of the increased level of sales that a retailer enjoys with the introduction of online shopping (Kim & Min, 2015). A company engaging in online shopping may also realise higher profitability because of the reduced cost of operation. For example, one does not need the physical store to sell goods online. This means that there is no rent cost involved. The reduced cost of operation has the potential of increasing profitability for retailers that sell their products online.

The possible impact of online shopping on the profitability of retailers can be deduced from the study by Cao, So and Yin (2016) who examine the impact of online-to-store channel on the profitability of retailers. The online-to-store channel is a channel where customers are allowed to pick online orders at the physical store. They established that this channel has both a positive and negative impact on profitability. With regard to the positive impact, Cao, So and Yin (2016) found that the online-to-store channel allows a retailer to tap into new customer segments, thereby generating new demands for their products. However, it can also negatively affect profitability by cannibalising existing channels and increasing cost of operation. It means that instead of bringing in new customers, existing customers may simply switch to the new channel (Wang, Gong, Wang & Tian, 2021). This increases the cost of operation without bringing in additional income.

Basically, there is no agreement among existing as to the impact of online shopping on profitability. This is because different sources examine online shopping from different perspectives (Cao, So & Yin, 2016). There are those who examine online shopping as a competition to physical stores while there are those that examine online shopping as a complement to physical store shopping (Wang, Gong, Wang & Tian, 2021). It is for this reason that there are those which show a positive impact of online shopping on profitability while there are those that show a negative impact on profitability.

Effect of online shopping on market expansion of retail businesses

Existing research shows that online shopping has a potential positive impact on market expansion of retail business. For example, Cao, So and Yin (2016) established that introducing the online aspect in the brick-and-mortar channel allows a retailer to tap into customer segments. This means that a retailer is able to expand their market when they include the online aspect in their selling.

On their part, Alzoubi et al (2022) established that there is a positive relationship between online shopping and sales growth. It implies that when a business engages in online shopping, its sales grow more. Sales growth is normally related to market expansion. A business realises growth in sales if it is selling its products to more consumers in the market. This means that the business has expanded its market (Wang, Gong, Wang & Tian, 2021). It can thereby be concluded that online shopping has a positive impact on market expansion of retail business. However, this is only possible if only there is no cannibalisation of existing channels.

Chapter summary

Basically, existing literature indicates that there is significant online shopping in the world today. This is due to convenience of online shopping. Previous studies also show that the impact of online shopping on sales and profitability depends on how online shopping is viewed, that is, as a competitor to the physical stores or complements to the physical stores. Lastly, existing literature shows that online shopping has the potential of enabling a retailer to expand their market.

 

 

Chapter 3: Research Methodology

Introduction

This chapter highlights how data was collected and analysed in this study. The aim is to indicate what techniques were used to collect data and why these techniques were preferred. The aspects highlighted in this chapter are research philosophy, research method, research approach, data collection, data analysis, and ethical consideration.

Research philosophy

Research philosophy is the belief about the manner in which data in a study should be collected and analysed. There are two main research philosophies used in research and these are positivism and interpretivism. Positivism is a research philosophy which holds that the only trustworthy knowledge is one which has been gained through observation and measurement (Alharahsheh & Pius, 2020). Positivists believe that social phenomena can be observed and measured. They also believe that social facts are fixed, unchanging, and universal. It means that social facts observed in one context should also be observed in another context (Ryan, 2018). It implies that research results obtained in one context can be used to predict the outcome in another context if the same phenomenon is being examined. Since positivism focuses on establishing facts, positivists advocate for use of quantitative methods of data collection. These methods collect mainly numerical data which allows for statistical analysis (Clarke, 2009). In addition, with positivism looking to collect only factual data, it indicates that the researcher should only play the role of the observer and not be involved in the actual research. The aim is to ensure that the researcher does not interfere with the collected data.

On the other hand, interpretivism holds that reality is subjective, composite of multiple perspectives, and socially constructed. It means the experiences people go through and possibly the level of knowledge they have about a phenomenon is what determines what they would consider to be reality (Alharahsheh & Pius, 2020). This means that one phenomenon is likely to be considered differently in different social contexts. It is for this reason that interpretivism advocates for subjective examination of research phenomena. It requires the researcher to examine people experiences, views, and reasons about the research subject (Ryan, 2018). It also advocates for the full involvement of the researcher in the study where the researcher has to give their own subjective view of the research subject. Generated knowledge under interpretivism is not considered to be the truth and cannot thereby be applied universally.

In this study, interpretivism was applied as a research philosophy. The reason for applying this research philosophy was to determine the perception of people with respect to what they feel is the impact of online shopping on retail business. This helped to gain a better understanding of the research subject (Clarke, 2009). It also helped to collect information that could be used to formulate theories on online shopping in retail business. For example, by focusing on people thoughts and views on the impact of online shopping on retail business, it was possible to theorise on why some retail businesses have selected to incorporate online shopping in their operations while others have selected not to incorporate it.

Research method

Research method is basically is the strategy or technique used to collect data. There are two main research methods and these are the qualitative and quantitative research methods. The qualitative method focuses on collection of non-numerical data (Gerring, 2017). Researchers who use this research method are interested in establishing reasons, experiences, and views on a research phenomenon. Quantitative research method, on the other hand, puts emphasis numerical data (Östlund, Kidd, Wengström & Rowa-Dewar, 2011). This method is used when the researcher intends to establish trends and/or statistical relationships among variables.

Each of the two methods has both advantages and disadvantages which make them effective in some areas and ineffective in others. For the qualitative method, one of its advantages is it is detailed. The qualitative method focuses on both the ‘how’ and ‘why’ questions (Queirós, Faria & Almeida, 2017). For example, in this case, the use of the qualitative method would help determine the kind of impact online shopping has on retail business and reasons why this is the case. This research method thereby provides more insight into the research subject.

Another advantage of the qualitative method is it is flexible. Under the qualitative method, the researcher is not required to follow certain established rules. Instead, they are allowed the freedom to approach the research subject in a manner they see fit (Antwi & Hamza, 2015). This means that if the researcher realises that useful insights are not being captured, they can adjust the approach used, change the questions, or improve variables in order to get the desired results.

Lastly, the qualitative method is ideal for complex research subjects that cannot be examined through straightforward statistical analysis which is normally used under the quantitative method (Choy, 2014). This is because the qualitative method is explorative in nature. Its use thereby allows the researcher to uncover valuable information about the research subject.

On the other hand, one of the main disadvantages of the qualitative method is its highly prone to bias. Since there are no rules that limit the actions of the researcher, this research method provides room for the researcher to be biased in the manner in which they collect and analyse data (Queirós, Faria & Almeida, 2017). As such, information obtained under this method is not necessarily factual.

Another disadvantage is this research method allows for use of only a small sample size. As indicated, this research method is detailed. This means that it takes a lot of time to collect data from one participant. It is thereby not possible to use a large sample size. The problem is the results obtained cannot be generalised to the study population (Antwi & Hamza, 2015). For example, in this case, there are thousands of retailers. However, the use of the qualitative method would only allow for use of a small number of these retailers. It cannot thereby be concluded that the results obtained are a reflection of the whole population.

For the quantitative method, one of its advantages is the results obtained can be tested and checked. The quantitative follows certain rules of data collection and analysis (Choy, 2014). For example, data collected under this method is analysed using statistical techniques. These techniques can be used to analyse the data again to verify whether the results presented are true.

The quantitative method is not prone to bias and this is because of the rules available that a researcher is supposed to follow in collecting and analysing data. These rules limit the level to which a researcher can manipulate results collected (Queirós, Faria & Almeida, 2017). This way, the researcher is not given the opportunity to present results in a way that appeals to their beliefs.

Lastly, the quantitative method allows for use of a large sample size. Unlike the qualitative method, the quantitative method is not detailed. This means that it takes only a short time to collect data from a participant (Choy, 2014). Some tools used under this method such as the questionnaire allow for collection of data from many participants at the same time. The use of a large sample size makes it possible to generalise the results obtained.

On the other hand, one of the disadvantages of the qualitative method is there is false focus on numbers. The quantitative method is sometimes limited in its pursuit for concrete statistical relationships which make it fail to recognise broader themes and relationships (Queirós, Faria & Almeida, 2017). As such, not all results obtained under the quantitative method are a reflection of reality.

The quantitative method is also not detailed. The quantitative method does not attempt to answer the ‘why’ question (Antwi & Hamza, 2015). As such, it is not possible to get adequate information on a research phenomenon when using this method. It is thereby not ideal for an explorative type of research.

In this study, the qualitative research method was used. The selection of this method was informed by the desire to get enough information on the research subject (Choy, 2014). The selection was also informed by the research philosophy employed. The qualitative method is in line with interpretivism.

Research approach

Research approach is basically the procedure used to carry out a research study. There are two main research approaches and these are inductive and deductive approaches. Inductive research approach begins with observations and theories are developed from the observations (Heit & Rotello, 2010). Under inductive approach, the researcher searches for patterns from observations made then theories are made to explain these patterns. On the other hand, deductive research approach begins with formulation of hypotheses then the hypotheses are tested to determine if they are true or not.

One of the advantages of inductive approach is it allows the research to work with probabilities. Not all probabilities are correct. Inductive approach allows the researcher to narrow down the probabilities to the most correct one. The inductive approach also fuels further exploration (Mallia, 2014). This further exploration allows a researcher to develop more knowledge and even determine if initial inferences and assessments were correct. On the other hand, its main disadvantage is it is limited in scope. This can result in an inaccurate inference.

The main advantage of deductive approach, on the other hand, is it can help explain causal relationships between variables. This helps to determine how phenomena affect each other. On the other hand, the main disadvantage of the deductive approach is the conclusion drawn can only be true only if the premises set at the start are true (Gorat & Prijambodo, 2013). In this case, the hypothesis or theory indicated at the start has to be true for conclusions to be true. However, this is not the case most of the time. As such, a study carried out using the deductive approach may lead to false results.

In this study, the inductive research approach was used. The reason for use of this research approach was to the need to develop a general theory in relation to the impact of online shopping on retail business.

Data collection

Data collection is the process of gathering information in order to answer the research questions. There are two main types of data collection and these are primary and secondary data collection. Primary data collection involves gathering information from the original source (Mazhar, Anjum, Anwar & Khan, 2021). For example, when data is collected from participants, this is termed as primary data collection. On the other hand, secondary data collection is gathering of information from existing sources. These sources include books and journal articles. One of the advantages of primary collection of data is it allows for collection of more accurate data (Feng, Duives, Daamen & Hoogendoorn, 2021). This is because data is collected from the source itself. Another advantage is it allows the researcher to collect the exact information they need. For example, through interviews, the researcher can ask participants information that is relevant to the research questions they are looking to explore.

On the other hand, one of the disadvantages of primary data collection is it is expensive and time consuming. For example, it takes a significant amount of time to interview participants in order to collect data (Sarkies et al., 2015). A researcher may also be compelled to spend significantly on materials and travel in order to interview participants for data.

For the secondary data collection, the main advantage is it is less expensive and time consuming. For example, it takes only a short time to get information from a book or journal articles. A significant number of secondary sources are now found online, meaning that it costs nothing to get information from these sources (Mazhar, Anjum, Anwar & Khan, 2021). On the other hand, the main disadvantage of secondary data collection is there is no assurance that one would get the information they desire. A researcher may thereby fail to effectively answer their research questions if they rely on secondary data collection.

In this study, the primary data collection methods were used. In primary data collection, data was collected using interviews. An interview is a conversation a researcher carries out with participants with the aim of gaining information relevant to the research subject (de la Croix, Barrett & Stenfors, 2018). There are three main types of research interviews and these are unstructured, semi-structured, and structured. The unstructured interviews are interviews which involves the researcher asking open-ended questions in order to collect information on the research subject (Chauhan, 2022). These interviews are in form of a conversation. The interviewer does not follow a particular structure and does not rely on any pre-developed questions to carry out the interview. The interviewer thereby asks questions that come in their mind at the time of interview. Unstructured interviews are used when a researcher wants to get general information about the research subject (Chauhan, 2022). The semi-structured interviews are interviews which are based on a predetermined thematic framework although the researcher has flexibility to ask questions as they please as well as ask additional questions to get more information on the research subject. The thematic framework contains questions that are used a guide for the interview (Newcomer, Hatry & Wholey, 2015). The interviewer carries out the interview along these questions but they can ask unplanned follow-up questions for clarification and for more information. Lastly, the unstructured interviews have a strict structure that is followed. In this interview, there are questions that the researcher has to follow and they are not allowed to ask any additional questions (Russano, Narchet, Kleinman & Meissner, 2014). These interviews are carried out when specific information is being sought.

In this study, the semi-structured interviews were used to collect data from participants. The reason for use of these interviews was to collect adequate information on the research subject but still ensure that the information being collected is relevant to the subject being examined.

To carry out the interview, the first step involved identifying the study population. The study population in this case is retailers. All types of retailers were considered for this study, that is, both small-scale and large-scale retailers. The next step involved selecting a sample from the retailers (Acharya, Prakash, Saxena & Nigam, 2013). A sample of 18 retailers was involved in this study. One criterion that all participants involved in this study had to meet is they had to have an online shopping platform in their operations. This is because only those who were involved in online shopping could understand its impact on their businesses.

Data analysis

Data analysis is the process of transforming collected data into meaningful information. In this study, thematic analysis technique was used. Thematic analysis is a data analysis technique which involves identification of key themes from the data collected. In carrying out thematic data analysis, the collected data from interviews was reviewed then key ideas identified (Clarke, Braun & Hayfield, 2015). These key ideas are termed as codes. The ideas were then developed into themes. The themes were then reviewed to determine if they need adjustment and whether some needed to be merged into one and others broken into two or more themes. The last step was presentation of the themes. The themes were developed in line with the research questions highlighted.

Ethical consideration

Since the study involved people, there was the risk of ethical breaches. One of them was privacy. To ensure privacy of participants is not breached, no personal information was collected. The interviews were also not video-recorded and the audios were destroyed immediately the interviews transcripts were obtained. Another ethical issue that was considered was informed consent (Hasan et al., 2021). There was the risk of participants being involved in the study without their consent. To avoid this, participant were provided with adequate information about the research study, the aim of the study, and any risk involved. This was to ensure that participation was voluntary and informed (Ketefian, 2015). Right of to terminate participation was also another ethical consideration that was focused on. Participants were informed that they had the right to terminate participation if they did not wish to part of the study anymore. They were informed that they did not have to give any reason for discontinuing participation. This was to ensure that those who participated did it out of their freewill and not out of coercion.

 

 

Chapter 4: Analysis and Discussion

Introduction

This chapter presents, analyses, and discusses the results obtained. The aim of the chapter is to make sense of the results obtained and determine whether they effectively answer the research questions posed. This chapter is key to developing theories on the impact of online shopping on retail business.

Findings

As indicated, the data was analysed using thematic analysis. Findings are thereby presented in form of themes identified. The themes identified from the data collected are significant level of online shopping, positive impact of online shopping on sales, lack of impact on sales, positive impact of online shopping on profitability, negative impact on profitability, positive impact of online shopping on market expansion, and no impact on market expansion.

Significant level of online shopping

From the interview carried out, it emerged that online shopping is significant among retailers who took part in this study. This is reflected in how often customers purchase products online even when compared to the physical store. For example, when asked how often customers engage in online interviewee 1 stated that:

Most of my customers purchase their goods online all the time. However, I would say that this is mainly the case with the younger customers. This group of customers, those aged 35 and below, purchase products online for most of the days with store purchases occurring only occasionally. However, the older customers still prefer the store purchases. All the same, my customers purchase their products online pretty all the time.

On their part, interviewee 6 indicated stated:

To paint a better picture of how often my customers purchase their products online, I would compare my store purchases when compared to online purchases. I would say that for most my customers, the ratio of online purchases to store purchases is 3 to 1. That would mean that 75% of the purchases are made online. So, yeah, online purchases is significant in my business.

Positive impact of online shopping on sales

Another important that was identified from the data collected is the positive impact on sales. When asked the question the question on how online aspect has impacted on sales, a significant number of participants indicated that their sales have improved considerably with the introduction of online selling. For example, interviewee 3 indicated that:

I would say that after incorporated the online aspect of doing business, my sales have improved considerably. If I am to give a figure, I would put it at a 30 to 50% increase in sales.

On the other hand, interviewee 7 indicated that:

The online element of operation has really boosted my sales. Initially, my average sales were 10,000 dollars in a good month. Currently, in a good month I make even double that amount. Most of the additional sales are online so I can confidently say that the online part is the key contributor to the increased sales I have witnessed in my business.

Lack of impact on sales

While majority of participants were of the view that online shopping has a positive impact on sales, some participants indicated that their sales have not changed significantly even with the introduction of online aspect of operation. For example, interviewee 12 stated:

I cannot say that the online part of the business has had a significant effect on my sales as a retailer. Any change in sales has been insignificant. I would say my level of sales have remained relatively the same.

On being asked why they think this is the case, interviewee 12 indicated that:

The reason, in my view, is most of my existing customers have simply switched to online buying. These customers see no need of coming to the store when they can purchase goods online and have them delivered to them. This is probably the reason why I have experienced significantly reduced store sales and a surge in online sales even as the overall sales remain generally the same.

Positive impact on profitability

On the question of how online shopping has affected the profitability of their retail businesses, majority of participants were of the view that online shopping has a positive impact on profitability. For example, interviewee 11 indicated that:

Without doubt introducing online shopping in my retail business has improved profitability considerably. The reason is obviously the increased sales I have experienced with the introduction of online shopping.

Negative impact on profitability

While majority of participants were of the view that online shopping has led to increased profitability, there are those who felt that online shopping has had a negative impact on the profitability of their businesses. For example, interviewee 17 indicated that:

While I expected online shopping to boost my profitability, the opposite has been the case for me. When I examine my net profit margins before and after introducing online shopping, I can say that the profitability level has reduced over time. The reason is sales have not changed yet the cost of operation has increased with the introduction of online shopping. As I said, I have witnessed significantly reduced sales in the store and increase in online sales. Sales have therefore remained generally the same yet the cost of operation has gone up due to the addition of online operation. This has contributed to reduced profitability.

Positive impact of online shopping on market expansion

On being asked whether online shopping has helped their businesses attract new customers, most participants answered in the affirmative. For example, interviewee 8 indicated that:

I believe online shopping has helped my business to attract new customers in the market. This is reflected in the increased sales. As you know, sales are an indication of the number of customers a firm has attracted. When sales increase, it means that more customers are buying your product and vice versa. So, the increase in sales after introducing online shopping in the business shows that my business has attracted many new customers.

No impact of online shopping on market expansion

While most participants felt that online shopping contribute to market expansion, others felt that it does not. For example, interviewee indicated that:

I cannot say that incorporating online shopping has helped my business to attract new customers. I say this because my sales are the same as before. It shows that the online sales I have been witnessing are from my existing customers who have simply switched from buying from the store to buying online.

In summary, the results show that there is a high level of online shopping among consumers in the market today. On the other hand, the impact of online shopping is mixed, with some cases showing an increase in sales due to online and others showing lack of effect of online shopping on sales. The impact of online shopping on profitability is positive in some cases and negative in others. Lastly, the impact of online shopping on market expansion is positive in some cases and not impact in others.

Analysis and discussion

The level of online shopping

The results show that there is most retailers have embraced online shopping. They also show that most customers in the market prefer online shopping when compared to buying from the physical store. The possible reason why this is the case is, as indicated, the convenience that comes with online shopping. People purchase online because it is easier, faster, and more convenient (Lim et al., 2016). For example, as pointed out, an individual is not required to travel to the store to get what they need with online shopping unless the model being used is the online-to-store model. One can order a product online and have it delivered to them. Such convenience makes people to opt for online shopping when compared to buying from the physical store.

Online shopping is also fast because it only involves a click of a button and one would have made a purchase. In most cases, products are delivered within a short time of ordering. This is particularly the case if one is the same locality as the business that sells the desired product (Al-Debei, Akroush & Ashouri, 2015). This has probably made many consumers to opt for online shopping as opposed to visiting the store.

Online shopping is also easy to carry out. With a phone and internet connection, one can easily log into a company’s online platform, search for the product they need, and make a purchase they desire (Gao & Su, 2017). This is unlike the physical store where one has to go search a product through the sections before finding it. It is for this reason that a significant number of consumers choose to purchase their products online.

Online shopping also offers customers with opportunity to explore multiple options before making a choice on the product they can purchase. As indicated, when a customer uses the online platform to purchase products, they are given the chance to browse through many products before selecting the one they feel meets their needs (Lim et al., 2016). Such an opportunity may be lacking in the physical store due to the limited number of options available to the customer, limited information on products, and undue influence from salespeople.

The high level of online shopping can also be due to the fact that in transcends boundaries. Online shopping overcomes the physical barriers that exist between consumers and businesses. For example, when one wants to purchase a product from the physical store, they have to look for the store that is nearby (Al-Debei, Akroush & Ashouri, 2015). In case the product is not in the store, one is compelled to travel a large distance to get or opt for an alternative product which they not like much. Online shopping solves this problem since one can order a product from a large distance and have it delivered to where they are (Lissitsa & Kol, 2016). While this might come with additional cost, normally the shipping cost, the cost involved when compared to the cost if a consumer had to travel to the point of purchase is usually lower.

The high level of online shopping can also be explained by the various theories highlighted as such as the flow theory, technology acceptance model, and innovation diffusion theory. For example, based on the flow theory, it is possible consumers prefer online shopping over physical store buying because of the good experience they get when they purchase products online (Obadă, 2013). Such experience may include the convenience that comes with this form of shopping and/or the feeling of being control in terms of selecting the product they wish to purchase. On the other hand, the technology acceptance model shows that online shopping may have been widely accepted among consumers and this could be due to ease of use and/or the benefits that come with purchasing products online.

Impact of online shopping on sales

The results on the impact of online shopping on sales in this study are mixed. There are those which show that online shopping increase sales while there are those which show that online shopping does not increase sales. From the reasons given, there are two scenarios that play where online shopping is concerned. The first one is where online shopping enables a retailer to attract new customers (Zhang & Ma, 2022). For example, online shopping allows a retailer to reach individuals beyond their immediate location. Normally, a physical store can serve people within a two-kilometre radius. People beyond this radius are likely to look for products at other stores (Pangemanan, Tulung & Tielung, 2022). However, when a retailer incorporates the online aspect, they can sell products to consumers at hundreds of kilometres away. This is the case of eBay and Alibaba which sell products even overseas despite them having no operations in some of these nations. This helps to increase sales. The other scenario is where existing customers simply switch to online shopping and no new customers are attracted. In this scenario, a retailer does not post increased sales. This scenario is possible where a business is not significantly known among consumers (Cao & Li, 2015). In the case of retailers, this can be true among small-scale retailers that are rarely known beyond a certain locality. Such retailers do not have the financial resources to carry out significant marketing that increase the level of awareness. This means that they are unable to attract new customers. In such a situation, introduction of an online platform maintain sales rather than increasing them.

The mixed results on the impact of online shopping on sales are an indication that incorporating online shopping in a company’s operations does not necessarily mean that a company would realise higher sales. This is despite the fact that most consumers in the market prefer online shopping when compared to visiting physical stores to purchase products. This could be due lack of awareness of a brand in the market (Cao & Li, 2015). It is important to note that consumers need to be aware of a business and its products for them to buy these products. Awareness in the market increases chances of a company attracting new customers for its products. On the other hand, awareness is a consequence of marketing. A company that engages in aggressive marketing creates more awareness about its brand which helps to attract customers. The problem is marketing is significantly expensive (Cao, So & Yin, 2016). This means that it can be carried out by only established big retailers such as Walmart. Small-scale retailers, as indicated, do not have the financial muscle to invest in marketing, meaning that they cannot create awareness among consumers beyond a certain point in the market.

However, as pointed out, whether or not online shopping has a positive impact on sales depends on how one views online shopping, that is, as a source of competition to, or a complement of the physical store (Cao & Li, 2015). When it is looked at as a standalone business such as the case of Alibaba or eBay which are purely online businesses, then the possible finding is online shopping negatively affects retailers, the assumption being that the retailers in question have a purely brick and mortar business model. With online shopping having being easier to carry, more convenient, and allowing consumers the ability to choose the product they desire, consumers are likely to choose online shopping over going to the store (Cao, So & Yin, 2016). This means that retailers that operate a purely brick and mortar business model may suffer from reduced sales.

The results on the impact of online shopping are in line with some previous studies which also show mixed results. For example, the results are in line with those of Cao and Li (2015) that also show a positive impact of online shopping. However, one new aspect that emerges in this study is the lack of impact on sales. There are cases where the level of sales remained the same despite introduction of online shopping. The possible reason is highlighted in the study by Cao, So and Yin (2016) who established that online shopping can lead to cannibalisation of existing channels. This means that the sales were being realised in other channels shift to the online aspect. In other words, instead of online shopping bringing in new customers, it eats into the customers brought in by other channels, in this case, the offline stores. In the end, sales remain the same despite increase in channels.

The impact of online shopping on profitability

The results on impact of online shopping on profitability are also mixed, with some participants reporting a positive impact on profitability while others reporting a negative impact. The most likely reason for these results is because its effect on sales. For example, online shopping can increase sales (Cao, So & Yin, 2016). An increase in sales results in an increase in the level profitability. On the other hand, online shopping may have no effect on sales. This is due to existing customers switching to this new platform. In such a case, a retailer will realise the same amount of sales at a higher cost of operation due to introduction of the new channel. Consequently, the net profitability reduces.

The results on the impact of online shopping on profitability are in line with the few reviewed studies which also show both a positive and negative impact of online shopping on profitability. For example, the results concur with those of Cao, So and Yin (2016) who established that online shopping can have both a positive and negative impact on profitability. The positive impact is a consequence of a retailer attracting more sales through the online platform. On the other hand, the negative impact is a consequence of the online platform cannibalising other channels. Consequently, while sales remain the same, the cost of operation increases. This leads to reduced net profitability.

Impact of online shopping market expansion

On the question of market expansion, the results show that online shopping can have a positive impact on market expansion of a retailer or have no effect on market expansion. Market expansion basically involves attracting new customers (Miyatake, Nemoto, Nakaharai & Hayashi, 2016). It means that there are situations where online shopping would help attract new customers to a company while there are cases where it would help a retailer attract new customers. As such, it can help a retailer expand its market or fail to.

One of the possible reasons why online shopping can contribute or fail to contribute to market expansion among retailers is the level of awareness among consumers. When consumers are aware of the online operations of a company, they are likely to purchase its products through the platform (Verhoef, Kannan & Inman, 2015). On the other hand, the level of awareness depends on the marketing, social media, attractiveness, influencers, and credibility among others. Marketing is one of the key factors that determine awareness of a brand among consumers in the market (Miyatake, Nemoto, Nakaharai & Hayashi, 2016). Marketing involves promoting a business’ products and/or services through advertising and other promotional methods. For example, when a company advertises its products through television or any other medium, consumers in the market became aware of it. Awareness is the first step in consumers becoming customers. For example, after becoming aware of a particular brand, consumers in the market are likely to look for more information about it and its products. If they like the product, then they may develop the intention to purchase them.

Social media, on the other hand, has become one of the key marketing tools due to its wide reach. Many people currently are on social media. As of 2021, there were over 4.26 billion social media users in the world (Valkenburg, Meier & Beyens, 2022). This means that when a business posts information on social media, a lot of people can it. This leads to a higher level of awareness which. Increased level of awareness may lead to higher sales and thereby market expansion.

The level of attractiveness of a brand is also another factor that may improve the level of awareness of the brand in the market, resulting in higher sales and expansion to other markets. This is because when a brand is highly attractiveness, it benefits from unplanned marketing (Çelik, 2022). For example, when a customer buys a product and finds that it is of high quality or performs beyond expectation, they are likely to talk about it with their family and friends. This word-of-mouth marketing may motivate other people to try out the product and see if it performs as it had been indicated. The consequence is increased level of sales and thereby market expansion.

Influencers, like social media and word of mouth promotion, also increase the curiosity about a product among consumers. Influencers are individuals with a sway on consumers. In most cases, influencers are celebrities such as actors and sportspeople. When a business engages these influencers to help it promote its products the level of awareness among consumers increases (Sudha & Sheena, 2017). For example, celebrities have millions of followers on social media platforms such as Facebook and Twitter. It means that any information they post is consumed by millions of potential customers. As such, when they promote a product, the level of attention the product gets is huge (Sudha & Sheena, 2017). In most cases, consumers decide to consume the product because, in their view, a product that is promoted and probably consumed by their favourite celebrity must be good.

It thereby be deduced that the ability of online shopping to help a retailer expand its market depends on other factors, key among them being awareness. If, for example, consumers are aware of a brand in the market, then online shopping acts as an incentive to consume the product because now they can easily access it (Lukic, 2012). It is for this reason that in some cases, retailers experienced increased level of sales with online shopping while in others there is no change in in sales.

The results obtained in this study point to a number of things. One of them is the growing prominence of online shopping. The results reveal that online shopping has grown significantly and is likely to grow even more. This is due to increased spread of the internet and acquisition of smart devices among people (Gurleen, 2012). With many people having access to the internet, it means that there are more people who are likely to buy products online. The high level of use of online shopping is also an indication that many consumers prefer this form of buying compared to the buying from the physical store. The possible reasons, as indicated, include convenience, ease of use, and speed (Gurleen, 2012). It implies that retailers and other businesses consider online shopping as a platform that can contribute significantly to their growth in the market. While they maintain physical stores due to those who still desire on buy goods from the physical store, they have concluded that it is important to establish online stores due to those who want to use this new platform for shopping.

The mixed impact of online sales shows that implementing online shopping is not adequate to increase sales for retailers in some cases. It means there are other key areas that must be focused on apart from online shopping if a retailer is to realise higher sales. One such possible area is marketing (Ramanathan, Subramanian & Parrott, 2017). As indicated, marketing can help retailers improve the awareness of their brands in the market, resulting in improved sales. Marketing can also ensure that consumers are aware about the option of online shopping and thereby use it.

The mixed impact of online shopping on profitability also points to the inadequacy of online shopping. This is given considering that profitability is directly related to sales. Normally, when a company makes higher sales, its profitability improves, provided the cost of operation does not increase at a disproportionately higher rate (Alzoubi et al., 2022). For instance, if sales increase by 50% and cost of operation increase by 100%, then profitability would reduce rather than increase. The same reasons that applied to sales apply to profitability. As pointed out, in situations where online shopping increases sales, the level of profits increases (Wang, Gong, Wang & Tian, 2021). On the other hand, in situations where online shopping does not affect sales, the level of profitability reduces since the cost of operation increases. It implies that for online shopping to improve the profitability of a retailer, it must have a positive impact on sales.

Lastly, the mixed impact of market expansion, like it is the case with sales, points to the inadequacy of online shopping in helping a retailer expand its reach. While theoretically online shopping allows a retailer to sell products to consumers in faraway locations, meaning that it can increase sales considerably (Cao, So & Yin, 2016). However, as demonstrated from the results, practically, it is not straightforward. A company can implement online shopping but still not expand its market. Like the case of sales, expanding the market involves a retailer creating more awareness among consumers about its presence in the market. As such, marketing is as crucial to increasing to sales as it is in helping a retailer to expand its market (Cao, So & Yin, 2016). In fact, market expansion and sales growth are synonymous because changes in one are a direct reflection of changes in another. In other words, sales can only increase if a business has expanded its market. The market, in this case, is not the geographical reach but rather the number of consumers in the market who are aware of and are willing to purchase a product. On the other hand, the amount of sales is a reflection of a firm’s market size. Increase in sales in implies that a business has reached out to more customers in the market and has attracted them to its products.

 

 

Chapter 5: Conclusions, recommendations and reflections

Conclusion

Basically, online shopping has become a major phenomenon in the business environment. This is reflected in the number of businesses that have introduced online aspect of operations as well as emergence of purely online businesses. In this study, the focus was to examine the impact of online on shopping on retail business. In particular, the study was focused on examining the level of online shopping among in the retail business, the impact of online shopping on sales, impact of online shopping on profitability, and impact of online shopping on market expansion among retailers.

The data in this study was collected using semi-structured interviews. It was collected from 18 retailers. The collected data was analysed using thematic analysis technique. This was aimed to identify the key themes from the data.

One of the main findings is there is significant level of online shopping among retailers. In other words, many retailers have incorporated online shopping in their operations. Another key finding is the impact of online shopping on sales in mixed. There are cases where online shopping has a positive impact on sales where there are cases where online shopping does not have any impact on sales. In other words, online shopping does not increase or decrease sales among retailers. It was also established that the impact of online shopping on profitability and market expansion is mixed. On profitability, it was established in this study that there is both positive and negative impact of online shopping on profitability. It was found that there are cases where online shopping improves a retailers’ profitability while there are those it reduces the profitability level. The reason for this is while there are cases where online shopping attracts new customers thereby enhancing sales and profitability, there are others where it cannibalises the existing channels. As such, while the cost of operation increases, sales remain the same. This, in turn, lowers the profitability of a retailer. Lastly, on the question of market expansion, it was found that there are situations where the impact of online shopping is positive on market expansion while there are situations where online shopping does not have any impact on market expansion of retail businesses.

Implications

Theoretical implications

One of the theoretical implications of the results in this study is the relationship between online shopping and sales, online shopping and profitability, and online shopping and market expansion is not straightforward. The results show that while online shopping may have a positive effect on the three factors, there are possibly mediating and moderating factors that influence his relationship. For example, it can be hypothesised from the results that online shopping has a positive impact on sales of a retailer provided the level of awareness of the retailer in the market is significantly. Awareness, in this case, is the moderating factor. In other words, if the level of awareness in the market about a retailer is high, the level of sales will increase significantly with introduction of online shopping.

Another theoretical implication is there is need for further research on the effect on online shopping and what factors affect its impact. For example, in this study, it was established that there are retailers that realised higher sales with online shopping while there are those that realised the same amount of sales even with introduction of online shopping. This raises the question as to why this is the case. While marketing has been identified as one of the possible causes, there are possibly more factors that that determine the impact of online shopping on sales, profitability, and market expansion. For example, in this study, all sizes of retail businesses were involved. Could size be one of the factors that determine how online shopping affect sales in a retail business? Such factors need to be examined more in research. In short, from a theoretical perspective, this study has set the stage for further research in the areas in order to provide better insight into the research subject.

Practical implications

One of the practical implications is retail businesses have to consider online shopping as one of the key strategies they should implement. As results have demonstrated, online shopping has become popular not only in the retail business but in all forms of business. This is because of, as pointed out, the number of people who have access to the internet. Billions of people in the world today have access to the internet, meaning that they can easily access online platforms and purchase products. In addition, online platforms are convenient, fast, and easy to use and this has encouraged many people to buy their products online. As such, retail businesses incorporating online aspect of business in their operation can help improve their performance in the market.

Another implication of the results is retail businesses that have implemented online shopping as part of their operations need to establish strategies that would reinforce the positive impact of online shopping. The results in this study while online shopping has the potential of enhancing the sales level of retail businesses, it is inadequate. The results demonstrate that in some cases, it is implementing online shopping alone may not improve sales. On the other hand, it may have a negative effect on profitability due to increased cost of operation with no change in sales. One area that retail businesses can focus on is marketing. As indicated, marketing would improve the level of awareness of retail businesses in the market which can, in turn, enhance sales. In this case, marketing would be aimed to inform consumers that now the retail business in question has an online option they can use to purchase products. This knowledge would encourage consumers to buy more. It may also attract new customers to the business.

However, while marketing is a strategy retail business can use to ensure they maximise the potential of online shopping, it is important to acknowledge, as indicated, that there are retail businesses that do not have the financial muscle to invest considerably in marketing, especially mainstream marketing. This means that some retail businesses may not benefit significantly from online shopping even with the knowledge of the strategies they need to implement in order to fully explore this new form of shopping. Nonetheless, there are a number of cheaper marketing options small-scale retailers can explore to ensure they have some level playing ground with big retailers. One of them is social media marketing. Retail businesses can use social media platforms such as Facebook to reach out to many consumers in the market at a very low cost. Such marketing would improve the level of awareness in the market even for small retail businesses. In short, retail businesses need to use marketing and any other method that can help enhance the level of awareness to complement online shopping.

Lastly, the results imply that incorporating online shopping does not necessarily have a positive impact on the financial performance of retail businesses. As results demonstrate, online shopping, in some cases, results in reduced rather than increased profitability. It means that retail businesses are not supposed to implement online shopping for its own sake. They are supposed to examine carefully the costs involved, the possible benefits, and what drawbacks come with implementing online shopping. It is possible that most retailers assume that online shopping would automatically help them increase sales. However, this is not the case. There are cases, as demonstrated in the results, where sales remain stagnant even with implementation of online shopping. Retailers thereby need to examine level of awareness of their brand in the market, especially the market beyond their physical reach in order to know whether online shopping can help them explore this market. The results also imply that retailers should be keen to inform consumers about their online platform. This can help attract consumers have the desire to buy from them but are hindered by the physical distance.

Recommendations

One of theoretical recommendations is for additional research to be carried out about the impact of online shopping on retail businesses. This is due to the mixed results obtained in this study. The mixed results point to lack of definitive conclusion with regard to the impact of online shopping. It leaves the question to what is the exact impact of online shopping on retail businesses. The results other questions that need to be examined further. One of them is whether the impact of online shopping on retail businesses is universal or specific to the unique characteristics of a retail business. Another important question is what contributes to online shopping having a positive impact on sales, profitability, and market expansion for one retail business and have no or negative impact on the three parameters for another retail. This study does not provide answers to these questions, meaning additional research is supposed to be carried out in order to get a clearer picture.

Practically, one of the recommendations is retail businesses need to introduce or improve their online selling since it has the potential of helping them improve their sales. This is because of the high number of people who use online selling. Another practical recommendation is for retail businesses to focus on promoting their brands in the market. The results show that online shopping can help retailers enhance their sales but that can only happen if consumers are aware of the brand in the first place. As such, together with introducing online shopping, retailers are supposed to implement strategies that improve the level of awareness of their brands in the market.

Limitations

One of the limitations of this study is the small sample size. As indicated, only 18 participants were involved in his study. This is against a population of thousands of retailers. The views expressed by these 18 individuals cannot be taken to mean the views of all retailers in the market. For example, by the fact that all the 18 indicated that online shopping is prevalent in retail businesses does not mean this is true. It could be that during sampling, the 18 were deliberately or inadvertently selected from retail businesses that are characterised by significant online shopping. It is possible that other retail businesses do not have the online option. Thereby the conclusion that online shopping is prominent among retailers may be false.

Another limitation of this study is overreliance on participants for data. All the data used in this study was obtained from respondents through interviews. The shortcoming with relying on respondents for all information is they can give false information. This is because of the desire to give the researcher the information they feel he/she wants to hear. For example, participants in this study may have indicated that online shopping improve sales when in reality it does not. With there not being empirical data that can be verified, it is not possible to determine if the information provided by participants is true or not.

There is also the problem of verification of information presented in this study. This study was carried out using the qualitative approach. One of the shortcomings of qualitative method is it is hard to verify results presented. For example, it is indicated that the level of online shopping among retailers is significant. The question is, how significant is online shopping? There is no concrete numerical data that can be used to measure how much is significant online shopping. The inability to verify results obtained under the qualitative method provides room for bias and manipulation of results to fit one’s desires.

Lastly, this study focused on retailers in general. There large and small retailers in the market and the size of a retailer has influence on how it performs in the market. For example, larger retailers have the resources to invest in better systems, including online shopping systems. On the other hand, small-scale retailers do not have adequate to invest in better systems that provide advantage in the market. Failure to focus on a particular type of retailers is likely the reason for the mixed results on the impact of online shopping.

Reflections

Research is an important part of the human life because it allows one to uncover knowledge that can help them solve problems and improve their lives. In business, research is important because it allows an entrepreneur to understand their business and their business environment better. This allows them to make prudent business decisions that do not only enable the business to survive in the market but to also thrive. This is what this research study.

This research study provides valuable knowledge in online shopping. With online shopping and generally online buying and selling having become significantly popular over the last few years and many opting to use online shopping platforms, it can be assumed by a retailer implementing online shopping will automatically realise higher sales. However, this is not the case. This research reveals that online shopping does not automatically result in better performance for retailers. This is an eye opener and it goes to underline the significance of carrying out the actual study.

This study provides one important lesson with regard to online shopping, especially where one considers online shopping as part of the physical store rather than a standalone business, and the lesson is online shopping has great potential of helping retail business to growth and expand. However, it requires significant help from other aspects of the business. For example, while online shopping is critical to the success of retailers, the support of other aspects such as marketing are equally critical because they ensure that online shopping is operating in an environment that allows it to have maximum positive impact.

Another important that can be learned from the study is no single aspect of a business is self-sufficient in bringing success. In this case, online shopping alone is unable to bring about success to retail businesses. Other aspects have to play a role to support online shopping. Without the support of the other systems of the businesses, there are no changes in the manner in the success of the business and in some cases, there is even negative effect. For example, results show that in some cases sales do not change and with increased cost of operation due to introduction of online aspect of operation, profitability reduces.

This research study provides valuable insight into the business operation as a whole. It shows that the success of any business depends on the whole system functioning optimally rather than just one part. This means that in the retail business, introduction of the online shopping should only be for purposes of boosting an already effective system by making it more effective or allowing a business to explore a part that has not been explored before.

However, it is also important to acknowledge that while the results in this study provide valuable insight into the possible impact of online shopping and how other parts of the business can play a role, they are by no means conclusive. The shortcomings of the study which have been highlighted need to be taken into consideration when considering these results. As such, the results should not be considered to be factual and conclusive but rather a step that can be used to further examine the research subject to gain better insight into it.

Avenues for further research

The mixed results obtained indicate there is need for further research in order to get better and more conclusive results. One avenue that requires further research is, as indicated, the mediating and moderating factors that affect the relationship between online shopping and performance of retail businesses, with the performance focused on sales, profitability, and market expansion. Understanding the mediating and moderating factors would enable researchers and retailers which areas of the business need to be adjusted in order to realise maximum benefits of online shopping. Another avenue of further research is the possible influence of size on the impact of online shopping. It is important to examine whether the size of the retail plays any role in the effectiveness of online shopping.